The impacts of in-state procurement preference policies on the economy of South Carolina

Abstract

Purpose

This paper aims to answer the question: What are the impacts of implementing in-state procurement preference policies on the economy of the state of South Carolina?

Design/methodology/approach

Toevaluate the impacts, the following six economic indicators were analyzed: jobs, personal income, real disposable income, output (sales), gross state product and value added. The data were collected from the South Carolina Procurement Services Office and were then analyzed using the Regional Economic Model Policy Insight (REMI PI+) for economic forecasting and policy analysis. The results from the REMI PI+ showed that implementing in-state preference policies benefitted the state and its communities economically.

Findings

Specifically, from 2010 until 2017, the total economic impact of implementing preference policies generated $17m in total output, 135 total job-years, $10.22m in gross state product (GSP), $10.27m in value added, $7.52m in income and $5.14m in real disposable personal income. The impact on the wholesale trade industry was over $5m in total industry output and approximately 27 jobs-years. In the manufacturing sector, the total impact was over $4m in output and approximately 17 jobs-years. The impact on the construction industry was approximately $3m in output and approximately 30 jobs-years. Although the values of these economic indicators were very small compared to the size of the state economy, they did outweigh the direct cost of implementing preference policies, thus demonstrating that overall the in-state preference policies contributed to South Carolina’s economy. However, further research is warranted to identify more precisely the benefits and costs of implementing preference policies.

Citation

Abutabenjeh, S., Gordon, S. and Mengistu, B. (2018), "The impacts of in-state procurement preference policies on the economy of South Carolina", Journal of Public Procurement, Vol. 18 No. 3, pp. 240-256. https://doi.org/10.1108/JOPP-09-2018-015